Discounts not low enough. Exemptions not wide enough.

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Yesterday, my wife went to Uniqlo while I look after the kids. After half an hour, she came out and said nothing matches what she wants or the price is too high. There are many cheaper Malaysian brands. I bought a pair of blue jeans. Original price was RM179.90 It’s now RM39.90 At least 30 pairs were still on the rack. However, there were only 3 sizes left. It’s either size 29 (many pairs left) or size 30 (many pairs left) or size 31 (last one on the rack). I could fit into 31, so I bought it. This discount was because of supply issue. It does not apply to all other jeans where the sizes are still available. It may be old stock (also known as UNSOLD stock) but let’s understand that the discount was applicable because there were some underlying reasons.

I read an article in thestar.com.my (click to read) quoting some examples which unfortunately I have to disagree with the buyers even if I am a buyer too. One buyer went to the Home Ownership Campaign (HOC) and was interested to buy a property. She asked for the price and the discount offered by the developer was only 5% and she expected 10%. Shouldn’t all developers offer 10% since this is the HOC? Another case quoted was a father buying from the secondary market and asked WHY the tax exemptions are only applicable for purchases from developers? Why not the exemption offered to all? It’s a very long article and there were a few other examples too. Do click here to read yeah.

Basically, it’s a market issue; demand vs supply. Here, it’s new stock versus unsold stocks just like the Uniqlo example above. In this case, if Uniqlo does not clear their old jeans stocks, they have no space to take in more new jean stocks. When it comes to properties, not many developers are willing to offer heavy discounts right from the beginning; when they first launched. Let’s be objective yeah. However, if the stocks remain unsold and the unit is completed, the motivation to sell is much higher.

As for the stamp duty exemption for example, let’s understand that the government was looking at clearing the unsold units rather than just focusing on first-time home buyers. For these first-time home buyers, they are building 100,000 affordable units in 2019 or 1 million units within 10 years. One day when the government is looking at increasing the transactions and the focus is only on first-time home buyers for example, then the stamp duty exemption is going to be applicable to every property and no longer just those under the unsold category. Stay focused. There are definitely gems in a slow market. However, it’s very tough to expect everything to be in order for everyone to be happy and buy. Yes, my view remains the same; as long as we are buying within our affordability, anytime is a good time to buy. Owning is better than renting. Happy understanding.

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<Featured Image is courtesy of Stock Photos from By Pressmaster>

written on 5 April 2019

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